IBM Halves Key Software Licenses For Quad-Core Servers

Karl Freund, vice president of IBM's pSeries server line, said business partners can immediately offer up to 50 percent off IBM software, such as WebSphere Application Server and DB2 Enterprise Edition, when sold with an IBM quad-core p5 5100Q, 510Q, 520Q, 550Q or 560Q.

The discount harkens a similar promotion offered a month ago by rivals Sun Microsystems and Oracle. In a high-profile press conference intended to reaffirm the two companies&' working relationship, Oracle CEO Larry Ellison and Sun CEO Scott McNealy announced a free Oracle Enterprise Edition database license available to Sun's high-end customers using UltraSparc IV or IV+ processors. Customers would be responsible for paying annual support and maintenance fees.

Additionally, Oracle recast its own software licensing policy for multicore processors in December by charging 50 percent of its database license fee per core, down from a previous 75 percent per core. Oracle is charging 25 percent of a license per core for servers based on Sun's eight-core T1 processor.

Freund said IBM's discount on licenses is designed to bring price parity to its multicore offering as companies seek to reposition licensing costs for dual-core and higher CPUs. "Our quad-core products are targeting a price-sensitive market, and they expect lower-priced software to come with it," he said.

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IBM launched its quad-core P5+ chip and servers in October. With the software announcement, IBM also unveiled several new Unix servers, including a quad-core p5 that the company said will be offered at a low price point.

Freund said IBM was not ready to provide details on which software SKUs would be covered under the new promotion. But he said the high-volume software licenses would be available to business partners immediately through their local pricing teams. The promotion will be available until the end of the year.

"Our intention is to cover all of it. Twenty percent of the product that drives 80 percent of the revenue will be covered under this promotional banner," Freund said.

He added that IBM is continuing to drive more p5 servers into midmarket companies. This quarter, the company is rolling out a pilot to train business partners in an IBM Innovation Center to use its migration tools to move customers on competing servers to p5 servers. The plan will come with joint marketing and funding.

IBM also is working to pair business partners with ISVs and will provide marketing funds to help the new teams offer solutions that meet the needs of the midmarket.